Thursday, July 23, 2009

Did joining the Euro cause the crash?

We appear to be seeing something of a pro-Lisbon propaganda campaign being launched. Today's IT reports that David O'Suillivan, the EU Commission's Director General For Trade made the bizarre claim that:

IF THIS country had remained outside the euro zone, the Irish punt would have “crashed through the floor” creating a far worse crisis than the present one, the European Commission’s top trade official has said


“The recent financial crisis and the recession it has provoked only further reinforce this argument. Without membership of the euro zone, the former Irish punt would have crashed through the floor, creating a major crisis for the economy well beyond this crisis we are currently experiencing.”

There's a slight problem with this reasoning - If we hadn't been in the Euro the retail banks wouldn't have been able to get their hands on Other Countries Euros to back their insane hundred Billion Euro lending spree. The recent property bubble couldn't have happened. In fact if we still had the Punt it might well have dropped like a stone, but it would have restored our competitiveness as it did so...

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